(Recasts; adds details, share movement)
May 30 (Reuters) - Merrill Lynch raised Federated Investors (FII.N) to "buy" from "neutral" citing stronger potential equity and fixed income growth.
"FII is often regarded solely as a money market play, but we believe equity and fixed income are key to its results, and are showing enough improvement to merit an upgrade," analyst Cynthia Mayer said in a research note.
Mayer, who has a price objective of $40 on the stock, raised her 2009 earnings estimates on the company to $2.75 from $2.65.
Separately, Mayer also raised Franklin Resources Inc (BEN.N) to "buy" from "neutral" and said it is the least expensive asset manager in the group.
Mayer has a price objective of $116 on Franklin's stock.
Shares of Federated were trading up 87 cents at $37.31, and Franklin's stock was up $2.07 at $100.94 in Friday morning on the New York Stock Exchange. (Reporting by Supantha Mukherjee in Bangalore; Editing by Pratish Narayanan)